This note was originally published January 23, 2014 at 11:45 in Macro
POSITION: 9 LONGS, 9 SHORTS @Hedgeye
The 3 main issues for the US stock market in our model are as follows:
- US consumption #GrowthSlowing (rate of change vs Q313’s sequential top)
- US stocks are down YTD (consensus chases performance)
- SPY just broke one of my immediate-term TRADE lines of momentum support (1837)
So, I’m not buying-the-damn-bubble #BTDB today. Maybe tomorrow. Maybe not.
Across our core risk management durations here are the lines that matter to me most:
- Immediate-term TRADE resistance = 1848
- Immediate-term TRADE support = 1821
- Intermediate-term TREND support = 1779
In other words, for the 1st time in months the SP500 is signaling A) lower-highs vs the all-time closing high and B) a very immediate-term TRADE momentum line breakdown with C) fundamentals (#GrowthSlowing) hanging out in the background.
Sure, there are plenty of reasons to buyem. Flows in particular are tantalizing. But a stock market that goes down on Down Dollar and Down Rates (today), is a stock market that is worried about something I haven’t had to worry about for a year now = #GrowthSlowing.
Keep moving out there,
Keith R. McCullough
Chief Executive Officer